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Reuters • Friday January 3, 2014 11:28 AM

AT&T Inc today offered customers of No.4 U.S. mobile provider T-Mobile U.S. Inc a $200
credit to switch to its service on top of a phone trade-in that could be worth another $250, amping
up competition between the two rivals.

AT&T, the No.2 U.S. mobile provider, announced the promotion after T-Mobile spent months
appealing to AT&T customers, and in anticipation of a new competitive offer expected from the
smaller company next week.

T-Mobile, 67 percent owned by Germany’s Deutsche Telekom AG , has been making inroads against
bigger rivals by criticizing them in its marketing and selling itself as more consumer-friendly
with cheaper prices and more flexibility.

It has already posted two quarters of subscriber growth after four years of losses as a
result of the promotions and has been trumping bigger rivals AT&T and Verizon Wireless in phone
customer growth.

AT&T is seen as the most vulnerable to T-Mobile’s aggressive promotions because both
companies use the same network technology making it easier for their consumers to switch.

T-Mobile’s outspoken Chief Executive John Legere has been building up anticipation for a new
offering it is expected to announce at an event on Jan. 8 at the Consumer Electronics Show in Las
Vegas.

In a New Year’s Day tweet, Legere listed winning over its rivals’ family plan customers as a
key goal this year, raising speculation his company will announce a new offer for families at the
Las Vegas event.

In order for T-Mobile to keep up its momentum, many analysts say it needs to be able to lure
entire families from its rivals, as AT&T has said the vast majority of its customers are
attached to family plans.

In an effort to steal T-Mobile’s thunder, AT&T said that beginning on Jan. 3, in a
limited-time offer, T-Mobile customers who switch to AT&T will receive a $200 credit per line,
which includes family plan customers.

The per-line credit could be on top of another credit of up to $250 if the customer trades in
their current smartphone. While it said trade-in values vary based on the model and age of the
smartphone, many of the latest phones will qualify for the $250 credit.